Vulcan Steam Forging Co. v. A. Finkl & Sons Co.

VULCAN STEAM FORGING CO., Plaintiff, v. A. FINKL & SONS CO., COMPOSITE FORGINGS LLC, FINKL HOLDINGS LLC, Defendants.

19-CV-962S

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK

January 26, 2021

DECISION AND ORDER

I. INTRODUCTION

In this action, Plaintiff Vulcan Steam Forging Co. ("Vulcan") seeks indemnification from Defendants A. Finkl & Sons Co., Composite Forgings LLC, and Finkl Holdings LLC, (collectively, "Finkl"), for losses or costs Vulcan has suffered or may suffer resulting from the malfunction of a metal forging that Defendants forged for Vulcan. Before this Court is Defendants' Motion to Dismiss Vulcan's complaint for lack of subject-matter jurisdiction and failure to state a claim upon which relief can be granted, pursuant to Federal Rules of Civil Procedure 12 (b)(1) and 12 (b)(6). For the following reasons, Defendants' motion will be granted in part and denied in part.

II. BACKGROUND

The following facts are taken from Vulcan's Amended Complaint, from status reports filed by the parties, and from the amended third-party complaint filed against Vulcan in Florida, which Vulcan attached to its complaint.¹ At this stage, this Courtassumes the truth of the factual allegations contained therein. See Hosp. Bldg. Co. v. Trs. of Rex Hosp., 425 U.S. 738, 740, 96 S. Ct. 1848, 48 L. Ed. 2d 338 (1976); see also Hamilton Chapter of Alpha Delta Phi, Inc. v. Hamilton Coll., 128 F.3d 59, 63 (2d Cir. 1997).

Vulcan is a New York business that produces and sells specialty steel products. (Amended Complaint, Docket No. 1-3, ¶¶ 1, 11.) On September 22, 2015, Vulcan entered into a contract with nonparty Concepts NREC, LLC ("Concepts"), a Vermont company, promising to provide two forged pieces to Concepts ("the Forging"). (Id., ¶ 13.) Vulcan then entered into a contract with Defendants for Defendants to forge the Forging. (Id., ¶ 15.) Vulcan received the finished Forging from Defendants and delivered it to Concepts in Vermont. (Id., ¶ 16.)

Concepts then used the Forging in an NOx expander wheel that it supplied to nonparty Ascend Performance Materials, LLC ("Ascend"). (Concepts' Third-Party Complaint against Vulcan, Docket No. 1-4, ¶ 8.)

The expander wheel catastrophically failed within hours of its installation, causing Ascend to suffer financial damages. (Id., ¶¶ 16, 34.) Ascend brought an action against Concepts in the District Court for the Northern District of Florida, and Concepts filed a third-party complaint against Vulcan in the same action. (Id., ¶ 17.) Concepts alleged that the Forging it received from Vulcan was defective and sought breach of contract and tort damages and equitable subrogation and indemnification from Vulcan for any losses Concepts suffered in Ascend's action against it. (Id., ¶¶ 17-48.)

In an order dated February 21, 2019, the District Court for the Northern District of Florida dismissed Concepts' third-party action against Vulcan, finding no personal jurisdiction over Vulcan. (Docket No 1-3, ¶ 19.)

Vulcan commenced this action for indemnification against Defendants in New York State Supreme Court, and on July 22, 2019, Defendants removed this action to federal court. (Docket No. 1.) Vulcan sought indemnification from Defendants for any losses it had suffered or might suffer as a result of the Forging's failure. (See Docket No. 1-3.) On July 29, 2019, the parties jointly moved to stay this action pending resolution of the Florida action and awaiting a possible suit by Concepts against Vulcan in Vermont. (Docket No. 8.) Concepts and Ascend ultimately settled the Florida action, and it was dismissed with prejudice on April 3, 2020. (Status Report, Docket No. 19 at p. 2.) Concepts had expressed an intention to sue Vulcan in Vermont, but at the time of Defendants' motion to lift the stay in the present action, filed on June 5, 2020, no Vermont suit had been brought. (Docket No. 19 at p. 1; Docket No. 21-1 at p. 3.)

On June 23, 2020, this Court lifted the stay of this matter. (Docket No. 24.) Defendants filed the present motion to dismiss on July 7, 2020. (Docket No. 25.)

III. DISCUSSION

Vulcan seeks judgment that Defendants are liable to it, pursuant to the parties' contract, for any judgment recovered against Vulcan in any action by Concepts or Ascend based on the failure of the Forging (First Cause of Action). Vulcan also seeks contractual indemnification from Defendants, if Ascend or Concepts recover judgment against Vulcan, based on the Forging's nonconformity with the specifications in Vulcan's order(Second Cause of Action). Vulcan seeks contractual and common-law indemnification for all damages, losses and expenses, including attorneys' fees, arising out of the performance of the Forging (Third Cause of Action.) It further seeks indemnification for the amount of any judgment against it based on Defendants' failure to procure general liability insurance (Fourth Cause of Action). Finally, it seeks a judgment that any liability imposed on Vulcan should be reduced pursuant to New York statutory indemnification and contribution law (Fifth Cause of Action).

Defendants move to dismiss Vulcan's amended complaint as premature, because no court has found Vulcan liable for any damages related to the Forging and there are no cases pending against Vulcan so that no claim for indemnification has yet arisen. Vulcan opposes Defendants' motion.

A. Rule 12 (b)(1)

A case is properly dismissed for lack of subject-matter jurisdiction under Rule 12 (b)(1) when the district court lacks the statutory or constitutional power to adjudicate it. Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000); Fed. R. Civ. P. 12 (b)(1). A plaintiff asserting proper subject-matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists. See Malik v. Meissner, 82 F.3d 560, 562 (2d Cir. 1996).

A federal court only has constitutional power to adjudicate a case when the "irreducible constitutional minimum of standing" is present. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560, 112 S. Ct. 2130, 2136, 119 L. Ed. 2d 351 (1992). For a plaintiff to have standing, it must allege: (1) an injury in fact—an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural orhypothetical; (2) a causal connection between the injury and the conduct complained of; and (3) the likelihood that the injury will be redressed by a favorable decision. Id.

The requirement that a plaintiff allege an injury-in-fact is closely linked to the doctrine of ripeness. Cellco P'ship v. City of Rochester, 473 F. Supp. 3d 268 (W.D.N.Y. 2020). "[C]onstitutional ripeness" is "a specific application of the actual injury aspect of Article III standing" i.e., an injury-in-fact. Id. (citing National Org. for Marriage, Inc. v. Walsh, 714 F.3d 682, 688 (2d Cir. 2013)). "Constitutional ripeness, in other words, is really just about the first [standing] factor—to say a plaintiff's claim is constitutionally unripe is to say the plaintiff's claimed injury, if any, is not 'actual or imminent,' but instead 'conjectural or hypothetical.' " Id. A case is not ripe for review, and thus not justiciable, if it "depends upon contingent future events that may not occur as anticipated, or indeed may not occur at all." Nat'l Org. for Marriage, 714 F.3d at 687 (quoting Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568, 580, 105 S. Ct. 3325, 87 L. Ed. 2d 409 (1985)).

In considering a motion brought under Rule 12 (b)(1), the job of the court is to determine whether the pleading "allege[s] facts that affirmatively and plausibly suggest that [the plaintiff] has standing to sue." Carter v. HealthPort Techs, LLC, 822 F.3d 47, 56 (2d Cir. 2016) (citing Amidax Trading Grp v. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir. 2011)).

The standing issue "may be raised by a party, or by a court on its own initiative, at any stage in the litigation, even after trial and the entry of judgment," Id. (quoting Arbaugh v. Y & H Corp., 546 U.S. 500, 506, 126 S. Ct. 1235, 163 L. Ed. 2d 1097 (2006)).

B. Rule 12 (b)(6)

Rule 12 (b)(6) allows dismissal of a complaint for "failure to state a claim uponwhich relief can be granted." Fed. R. Civ. P. 12 (b)(6). Federal pleading standards are generally not stringent: Rule 8 requires only a short and plain statement of a claim. Fed. R. Civ. P. 8 (a)(2). But the plain statement must "possess enough heft to show that the pleader is entitled to relief." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557, 127 S. Ct. 1955, 1966, 167 L. Ed. 2d 929 (2007).

When determining whether a complaint states a claim, the court must construe it liberally, accept all factual allegations as true, and draw all reasonable inferences in the plaintiff's favor. Goldstein v. Pataki, 516 F.3d 50, 56 (2d Cir. 2008); ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007). Legal conclusions, however, are not afforded the same presumption of truthfulness. See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009) ("The tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.")

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). Labels, conclusions, or "a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. Facial plausibility exists when the facts alleged allow for a reasonable inference that the defendant is liable for the misconduct charged. Iqbal, 556 U.S. at 678. The plausibility standard is not, however, a probability requirement: the pleading must show, not merely allege, that the pleader is entitled to relief. Id.; Fed. R. Civ. P. 8(a)(2). Well-pleaded allegations in the complaint must nudge the claim "across the line from conceivable to plausible." Twombly, 550 U.S....